Real Estate & Property Law

Cert Petition in Ninth Circuit Case on Reserved Powers, Contracts Clause in Repeal of Eminent Domain Ordinance (Matsuda)

By rht

The City and County of Honolulu has filed a petition for writ of certiorari in Matsuda v. City and County of Honolulu, No. 06-15337 (9th Cir. Jan. 14, 2008), asking the U.S. Supreme Court to review the case.  We don't have a copy of the cert petition yet, but when we do, we'll post it.  The Supreme Court docket report is here (No. 07-1305).

Matsuda involved th repeal of "chapter 38," Honolulu's version of the Hawaii Land Reform Act at issue in Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984).  Chapter 38 allowed for conversion of condominium interests to fee simple, via a condemnation process. 

In Matsuda, apartment owners applied to the city to "convert" (condemn) their apartment leases, and entered into written contracts with the city, in which the apartment owners each agreed to pay the city $1,000, in return for which the city promised that after its acquisition of the lease, it would convey it to the apartment owner.  The owners subsequently received the city's approvals, but final approval by the City Council was withheld because the council was already considering repealing chapter 38, which it did in 2005. 

The ordinance repealing chapter 38 eventually contained a provision allowing any conversion proceeding which has been approved by the City Council to be completed, but because Matsuda's had not received final council approval, the taking was denied.  Matsuda and others filed suit against the city in federal court, alleging that the repeal of chapter 38 was a violation of the U.S. Constitution's Contracts Clause.  The Ninth Circuit held that the district court should have viewed the repeal of Chapter 38 with "heightened scrutiny" because the repeal of Chapter 38 was the city voiding its own contracts.  A complete summary of the Ninth Circuit's opinion is posted here.

Tim Sandefur added his thoughts about Matsuda here, and Professor Gideon Kanner's are posted here.  More to follow when we receive a copy of the cert petition.

Full post as published by inversecondemnation on April 18, 2008 (boomark / email).